Campbell v. Gaither et al
Filing
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ORDER denying as moot 6 Motion for Protective Order; denying 7 Motion for TRO. Plaintiffs claims against Defendants for failure to pay and report sales and income tax and for fraud against the state Employment Security Commission are DISMISSED for lack of subject matter jurisdiction and lack of standing. Signed by District Judge Frank D. Whitney on 5/13/2011. (tmg)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:11-cv-190-FDW-DSC
ROY LANE CAMPBELL,
Plaintiff,
vs.
WAYNE GAITHER, IAN GAITHER, and
Does 1-49,
Defendants.
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ORDER
THIS MATTER is before the Court on pro se Plaintiff’s Motion for Protective Order (Doc.
No. 6) and Motion for Temporary Restraining Order (“TRO”) (Doc. No. 7). Having reviewed
Plaintiff’s Motions, the Court concludes that the relief sought in the Motion for Protective Order is
actually the same injunctive relief sought in the Motion for TRO. The Court therefore DENIES
Plaintiff’s Motion for Protective Order as moot. The remainder of this Order will address Plaintiff’s
Motion for TRO. For the reasons set forth, the Court concludes Plaintiff lacks standing to prosecute
Plaintiff’s claims relating to sales and income tax evasion and unemployment insurance fraud.
Those claims are accordingly DISMISSED.
As to Plaintiff’s remaining claims for racial
discrimination and breach of the covenant of quiet enjoyment, the Court concludes Plaintiff has not
made the showing necessary for a TRO to issue. Plaintiff’s Motion for TRO is DENIED.
I. BACKGROUND
Plaintiff filed suit on April 18, 2011, alleging several causes of action against named
Defendants, Wayne and Ian Gaither, including conspiracy to evade sales and income tax payments
(Am. Compl. ¶¶ 6, 9) and to commit unemployment insurance fraud (Am. Compl. ¶ 7). Plaintiff
further alleges that he and Defendant Wayne Gaither are co-tenants of a “demised property” located
at 5924 North Tryon Street, Charlotte, North Carolina (“the property”), that Defendants have
breached the implied covenant of quiet enjoyment (Am. Compl. ¶ 8, 11) and that Defendant Wayne
Gaither has “interfered, has attempted to interfere, [and] has attempted to intimidate Plaintiff of his
rights as a co tenant [sic]” of the property. (Am. Compl. ¶ 10). Plaintiff alleges, on information and
belief, “that such action(s) by Defendant(s) are racially motivated and violates Plaintiff rights as
provided for by the Constitution Of The United States of America [sic].” (Id.) Plaintiff describes
himself as Caucasian and alleges Defendants are African-American. (Am. Compl. ¶¶1-3). Plaintiff
seeks to enjoin Defendants from interfering with Plaintiff’s access to the property, from disturbing,
pilfering, or damaging “any assets Plaintiff has a financial or personal interest [sic],” and apparently
from enforcing a non-judicial eviction notice Plaintiff alleges Defendants mailed to him. (Doc. No.
7 at 2; Doc. No. 7 Exh. A). Plaintiff amended his Complaint as a matter of course on May 13, 2011,
to clarify the terms of the co-tenancy agreement, but has not added any new claims for relief or
parties.
Plaintiff does not provide a short or plain statement of the grounds for subject matter
jurisdiction, as required by the Federal Rules of Evidence. Rule 8(a)(1). Instead, Plaintiff alleges
that the amount in controversy exceeds $75,000, but further alleges that Plaintiff and the named
Defendants are all citizens of North Carolina. (Am. Compl. at 1, ¶¶ 1-3). The only other discernible
basis for jurisdiction appears to be Plaintiff’s conclusory assertion that Defendants have interfered
with his property rights due to racial animus, in violation of the federal Constitution. (Am. Compl.
¶ 10).
II. DISCUSSION
A.
Plaintiff Lacks Standing as to Tax and Insurance Fraud Claims
Subject-matter jurisdiction involves the Court’s power to hear a case and thus the Court has
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an independent obligation to determine whether it has jurisdiction to consider the merits of a case
“even in the absence of a challenge from any party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514
(2006) (citation omitted). Furthermore, “[f]ederal courts are courts of limited jurisdiction. They
possess only that power authorized by Constitution and statute, which is not to be expanded by
judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden
of establishing the contrary rests upon [Plaintiffs].” Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994) (citations omitted). Specifically, Plaintiff has the burden of establishing
jurisdiction either through diversity of the citizenship of the parties under 28 U.S.C. § 1332 or by
raising a federal question pursuant to 28 U.S.C. § 1331.
It is well-established that in addition to the normal jurisdictional requirements, Plaintiff must
also have standing to file suit. See e.g., Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102
(1998). Article III of the Constitution restricts the federal courts to hear only actual cases and
controversies. “Among the several doctrines that have grown up to elaborate [this] requirement, the
one that requires a litigant to have ‘standing’ to invoke the power of a federal court is perhaps the
most important.” Friends of Ferrell Parkway, LLC v. Stasko, 282 F.3d 315, 319 (4th Cir. 2002)
(citations omitted).
Standing requires that a plaintiff have “a sufficient personal stake in the
outcome of [the] dispute to render judicial resolution of it appropriate in a society that takes
seriously both ‘the idea of separation of powers’ and, more fundamentally, the system of democratic
self-government that such separation serves.” Id. (quoting Allen v. Wright, 468 U.S. 737, 750
(1984)). As with other jurisdictional requirements, Plaintiff bears the burden of establishing he has
standing to bring suit. Id. (citations omitted).
In order to demonstrate standing, Plaintiff must satisfy the “irreducible constitutional
minimum” that (1) he has suffered an injury in fact, that is,“an invasion of a legally protected
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interest that is (a) concrete and particularized and (b) actual or imminent, not conjectural or
hypothetical;” (2) the injury is fairly traceable to the defendant’s actions; and (3) it is likely, and not
merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992) (internal quotations omitted); see also Long Term Care Partners,
LLC v. United States, 516 F.3d 225, 230-31 (4th Cir. 2008). In addition to this constitutional
threshold that Plaintiff must satisfy, there also exists certain judicially-imposed prudential
limitations to standing which includes limits on the ability of a plaintiff to assert legal rights
resulting only from a party’s status as a citizen or taxpayer. See Schlesinger v. Reservists Comm.
to Stop the War, 418 U.S. 208, 218-228 (1974).
Here, Plaintiff’s claims that Defendants have failed to pay sales tax to the “North Carolina
Department of Revenue” on sales of furniture made at Defendants’ retail furniture store (Am.
Compl. ¶ 6), have failed to declare rental payments on the property as income to either the Internal
Revenue Service or the North Carolina Department of Revenue (Am. Compl. ¶9), and have
committed fraud against the state Employment Security Commission (Am. Compl. ¶ 7), all suffer
from a number of jurisdictional and standing defects.
First, it is not readily apparent how fraud against the North Carolina Department of Revenue
or the North Carolina Employment Security Commission implicate a federal question.1 Although
it is well-established that federal courts enjoy federal question jurisdiction over some state law
claims, the scope of jurisdiction has been limited to those claims that “‘really and substantially
involv[e] a dispute or controversy respecting the validity, construction, or effect of [federal] law.’”
Grable & Sons Metal Prod., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313 (2005) (quoting Shulthis
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Because the parties are non-diverse (Am. Compl. ¶¶ 1-3), the Court will only have subject matter
jurisdiction to consider Plaintiff’s claims if they raise a federal question pursuant to 28 U.S.C. § 1331.
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v. McDougal, 225 U.S. 561, 569 (1912)). Plaintiff has not asserted any claims that implicate the
validity, construction, or effect of federal law relating to these claims.
Second, this Court is simply unaware of any statute or law, either in the United States Code
or the North Carolina General Statutes, which provides a private right of action for plaintiffs to sue
a private individual for failure to pay or declare taxes to the state or federal governments. Nor is this
Court aware of any law which provides a private right of action to Plaintiff for the fraudulent
unemployment benefits payments Defendant Ian Gaither is allegedly receiving from the state
Employment Security Commission. Instead, the Court will cleave to the long-standing reluctance
of the federal courts to infer a private right of action in the absence of any evidence of legislative
intent to create one. See, e.g., Touche Ross & Co. v. Redington, 442 U.S. 560, 568 (1979). Plaintiff
has presented no such evidence or allegation.
Finally, even assuming a private action did exist as to these claims, and that some nexus
existed between federal funds and the state Employment Security Commission or Department of
Revenue sufficient to create a federal question as to the failure to pay state taxes–which Plaintiff has
not alleged–Plaintiff has not suffered a concrete or particularized injury from Defendants’ alleged
conduct. Lujan, 504 U.S. at 560. Instead, the alleged unemployment insurance fraud victimizes the
state of North Carolina and its citizens as a whole, which is insufficient to provide standing.
Schlesinger, 418 U.S. at 220 (“standing to sue may not be predicated upon an interest of the kind
alleged here which is held in common by all members of the public, because of the necessarily
abstract nature of the injury all citizens share”). Likewise, the failure to pay sales or income taxes
injures the state and federal governments as a whole, and Plaintiff’s status as a citizen or taxpayer
that (presumably) does pay taxes would not be sufficient to provide standing for those claims. Id.;
see also Flast v. Cohen, 392 U.S. 83, 102 (describing the required nexus between the plaintiff’s
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status as a taxpayer and the alleged injury necessary to provide standing).
Accordingly, Plaintiff’s claims alleging a failure to pay or report sales and income taxes and
alleging fraud against the North Carolina Employment Security Commission must be DISMISSED
for lack of subject matter jurisdiction and lack of standing. The only claims that remain are
Plaintiff’s claims for racial discrimination and breach of the implied covenant of quiet enjoyment.
B.
Motion for TRO
A TRO, like a preliminary injunction, is “an extraordinary remedy” that affords, on a
temporary and preliminary basis, the same relief which can be granted by a permanent injunction
to be issued after trial. Real Truth About Obama, Inc. v. Fed. Election Comm’n, 575 F.3d 342, 345
(4th Cir. 2009), vacated, 130 S. Ct. 2371, adhered to in relevant part, 607 F.3d 355 (4th Cir. 2010).
In order for a TRO to issue, Plaintiff must meet four elements: (1) that he is likely to succeed on the
merits; (2) that he is likely to suffer irreparable harm in the absence of preliminary relief; (3) that
the balance of equities tip in his favor; and (4) that an injunction is in the public interest. Id.
(quoting Winter v. Natural Resources Def. Council, 555 U.S. 7, 374 (2008)).
Plaintiff has failed to demonstrate that he is likely to succeed on the merits on his claim of
racial discrimination in violation of the federal Constitution. (Am. Compl. ¶ 10). It is not clear what
constitutional provision Plaintiff sues under, but the only available avenues for relief appear to be
either the Fourteenth Amendment or 42 U.S.C. § 1985. As an initial matter, Plaintiff’s Complaint
contains no allegations of state action and instead alleges only that private individuals have
interfered with Plaintiff’s property rights based on a conclusory statement of racial animus. Because
the Fourteenth Amendment is directed at the states, actions brought pursuant to the Fourteenth
Amendment must allege conduct that may be fairly characterized as “state conduct” in order to be
actionable. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 924 (1982). Thus, without an
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allegation of state action, Plaintiff’s claim of racial discrimination has failed to state a claim for
relief under the Fourteenth Amendment.
To the extent Plaintiff alleges a conspiracy among the named Defendants to deprive civil
rights in violation of 42 U.S.C. § 1985(3), Plaintiff has also failed to indicate his likelihood of
success on the merits. Although § 1985(3) does apply to wholly private individuals, the statute only
applies to a narrow range of conduct. Griffin v. Breckenridge, 403 U.S. 88, 101-02 (1971). In order
to prevail on a § 1985(3) claim, Plaintiff must prove, inter alia, “(1) that some racial, or perhaps
otherwise class-based invidiously discriminatory animus lay behind the conspirators’ action, and
(2) that the conspiracy aimed at interfering with rights that are protected against private, as well as
official, encroachment.” Bray v. Alexandria Women’s Health Clinic, 506 U.S. 263, 268 (1993)
(internal quotations and alterations omitted) (quoting Griffin, 403 U.S. at 102; Carpenters v. Scott,
463 U.S. 825, 833 (1983)). Specifically, courts have insisted that actionable conduct under §
1985(3) must be “independently unlawful.” Harrison v. KVAT Food Mgmt., Inc., 766 F.2d 155,
162 (4th Cir. 1985). Ultimately a § 1985(3) claim turns on the presence or absence of “racial . . .
invidiously discriminatory animus,” which the Supreme Court has read to mean racial animus
directed at a protected group by reason of its race. See Bray, 506 U.S. at 270.
Assuming for the sake of argument that Plaintiff’s status as a Caucasian puts him within a
protected class for the purposes of § 1985(3), see Stevens v. Tillman, 568 F. Supp. 289, 293 (N.D.
Ill. 1983), Plaintiff’s Complaint only makes a conclusory statement that Defendants’ alleged
interference with his rights in the property is racially motivated. (Am. Compl. ¶ 7). There are no
factual allegations–aside from Plaintiff’s allegation that he is white and Defendants are black–that
support a claim of “invidiously discriminatory animus.” The Court cannot infer that Plaintiff will
prevail on a § 1985(3) on such paltry allegations.
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Furthermore, Plaintiff admits that he is co-tenant of the property with Defendant Wayne
Gaither and thus the statutory limit on a § 1985(3) claim, requiring trespass in pertinent part, Griffin,
403 U.S. at 102-03, has not been satisfied. While the circumstances surrounding the alleged nonjudicial eviction are not clear (Doc. No. 7 Exh. A), there is no allegation that the conduct is
“independently unlawful” given Plaintiff’s admission that Defendant(s) have an equal share in the
property. In short, Plaintiff has not alleged sufficient facts to demonstrate the plausibility of his
claim of racial discrimination, let alone the likelihood that he will succeed on the merits.
Accordingly, Plaintiff is not entitled to a TRO as to this claim.
Nor is Plaintiff entitled to a TRO on his claim for breach of the covenant of quiet enjoyment.
Given Plaintiff’s allegation that Plaintiff and Defendant Wayne Gaither are co-tenants of the
property (Am. Compl. ¶¶ 8, 11), there is no covenant of quiet enjoyment, which only pertains to
lease agreements executed between a landlord and tenant, and thus Plaintiff has not established a
likelihood of success on this claim. See K&S Enters. v. Kennedy Office Supply Co., Inc., 520
S.E.2d 122, 126 (N.C. Ct. App. 1999); McNamara v. Wilimington Mall Realty Corp., 466 S.E.2d
324, 328 (N.C. Ct. App. 1996). To the extent that pro se Plaintiff seeks to enjoin an ouster or some
other deprivation of his rights as a co-tenant of the property, Plaintiff has not made the requisite
showing necessary for a TRO to issue as to this claim. Specifically, Plaintiff has not demonstrated
that he will suffer irreparable harm in the absence of preliminary relief as a number of remedies are
available for Plaintiff to recover the value of the property. Nor has Plaintiff made any showing
whatsoever that the balance of equities tip in his favor or that an injunction is in the public interest.
To the extent that a landlord-tenant relationship actually exists between Plaintiff and Defendants that
may entitle Plaintiff to relief under a breach of the covenant of quiet enjoyment, Plaintiff has still
failed to make the requisite showing required for a TRO.
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Thus, Plaintiff’s Motion for TRO is DENIED.
III. CONCLUSION
IT IS THEREFORE ORDERED:
1)
Plaintiff’s claims against Defendants for failure to pay and report sales and income
tax and for fraud against the state Employment Security Commission are
DISMISSED for lack of subject matter jurisdiction and lack of standing.
2)
Plaintiff’s Motion for Protective Order (Doc. No. 6) is superseded by Plaintiff’s
Motion for TRO (Doc. No. 7) and is DENIED as moot.
3)
Plaintiff’s Motion for TRO (Doc. No. 7) is DENIED.
IT IS SO ORDERED.
Signed: May 13, 2011
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